The food ingredients division of Penford, based in Centennial, Colorado, has reported sales of $16m in its 2010 Q1, 5 per cent down on the same period of 2009. But its operating income was up 5 per cent, to $3.581m.
The sales figures take account of the divestment of Penford’s dextrose sweetener business in Q2 last year for a $1.6m, a move taken as dextrose was no longer seen as part of core strategic offering.
Also at the close of last year it divested it activities in Australia and New Zealand. This included the sale of its starch business to National Starch – itself up for sale – for US$12m (with a further $2m placed in escrow to be collected as conditions are fulfilled over the next 30 months. Declines in performance of these divisions had been recorded in recent quarters, partly due to inclement currency exchange rates.
The proceeds from the sales in Australia and New Zealand have been used to reduce group debt. The company said it is able to focus on expanding specialty products and overall company returns.
The company said it experienced a 4 per cent decline in its coatings (batters) sales in Q1, as customers were said to using up stocks and letting inventories drop back to usual levels.
Although this had a significant effect on the overall performance of the division, since coatings make up 50 per cent of food ingredient sales, boosts from other parts of the food ingredients portfolio made up for it.
Protein, bakery and pet chew applications were all seen to deliver double-digit improvements from the same period of last year.